Yankees Defy Recession to Reel In Another Star

By MICHAEL S. SCHMIDT and JAY SCHREIBER

Published: December 24, 2008

Continuing to spend money as if they were printing it, the Yankees on Tuesday reached agreement with the All-Star free-agent first baseman Mark Teixeira on an eight-year, $180 million contract that pushes the team's off-season expenditures within shouting distance of half a billion dollars.

The signing underlines the Yankees' economic might as they move into a new stadium with the help of public financing and makes clear their willingness to remain aggressive spenders in the midst of a recession.

The signing, which was confirmed by a person in baseball with knowledge of the matter, will not be official until Teixeira (pronounced tuh-SHARE-uh) has a physical. Once it becomes official, the Yankees will have the four players -- Teixeira, Alex Rodriguez, Derek Jeter and the newly signed C. C. Sabathia -- with the largest contracts in the sport, at an overall cost of slightly more than $800 million.

The signing also means that the Yankees, whose 2008 payroll of $209 million dwarfed the competition, will now have a 2009 payroll that will probably be close to that amount and at least $50 million more than the next team on the list.

None of this, of course, guarantees that the Yankees are headed back to the World Series. Despite their payroll advantage, they missed out on the postseason in 2008 for the first time since 1993, and they have not been to the Series since 2003. In recent seasons, they have watched Boston emerge as baseball's most successful team, with the Red Sox winning two championships while spending a good deal of money, but nowhere near as much as the Yankees.

For weeks, the Red Sox were seen as the favorites to land Teixeira, a powerful 28-year-old switch-hitter who is also an excellent fielder. They had made him their prime target of the off-season and did not budge from their pursuit even as the Yankees closed in on two highly coveted starting pitchers, the left-handed Sabathia and the right-handed A. J. Burnett, signing them for a combined $243.5 million.

Let the Yankees pay a fortune for pitching, the Red Sox seemed to reason. They would save their money for the safer bet, Teixeira, a player less likely than a pitcher to encounter a serious injury over the course of a long contract. Closing in on an apparent deal, John Henry, Boston's owner, and Theo Epstein, the team's general manager, traveled to Texas last Thursday to meet with Teixeira and his agent, Scott Boras.

The Red Sox were believed to be offering a contract for perhaps eight years at a figure close to $170 million. Teixeira would become the big bat in the Boston lineup to replace the departed Manny Ram?z. But instead of an announcement that a deal had been reached, Henry sent an e-mail message to reporters in which he said the Red Sox were not going to be a factor in the bidding because of other, higher offers that Boras cited.

Henry's message was perceived as more of a ploy than anything else, an attempt to call Boras's bluff that there were indeed better offers from one or more of Teixeira's other major suitors -- the Los Angeles Angels, the Washington Nationals and the Baltimore Orioles.

Boras is the most prominent agent in baseball and often the most confounding for teams to deal with. He aims high, battles for every last dollar, takes his time reaching agreements and often cites offers for his players that rival teams question.

In turn, the Red Sox, under Henry, Epstein and Larry Lucchino, the team president, have developed a reputation as a team that spends but also draws a line in contract negotiations, regardless of the player involved.

That unsentimental, even stubborn, stance led to the departure in recent seasons of two fan favorites -- Pedro Mart?z and Johnny Damon -- and nearly led to the loss of a third, Mike Lowell.

In this instance, the Red Sox continued talking to Boras about Teixeira and, according to The Boston Herald, increased their bid slightly. But that was about all Boston would do, even though it knew the risk involved in challenging Boras.

Boras, meanwhile, proceeded to do what he has done in other standoffs -- he went to the Yankees, who until that point had not pursued Teixeira aggressively. As much as they appreciated his abilities, even they were leery of how much he would cost.

But the Yankees are the Yankees, with resources others don't have, and as they saw the opening left by the Red Sox they started doing the math. They were the team that snared Damon from Boston in December 2005 with a four-year arranged by Boras, and by early Tuesday morning they were the team back at it with Boras again, negotiating for a player who has few, if any, flaws.

The person with knowledge of the talks between Boras and the Yankees' general manger, Brian Cashman, said the deal was done by about 3 p.m., giving the Yankees a player who hit .308 last season with 33 home runs and 121 runs batted in while playing for the Atlanta Braves and the Angels. He will combine with Rodriguez to give the Yankees a revised, but still imposing, middle of the order.

For Cashman, the deal represents a quick, and adept, shift in strategy. He had emphasized pitching in the current off-season even though the 2008 Yankee lineup scored nearly 200 fewer runs than the 2007 version and even though two key hitters -- Jason Giambi and Bobby Abreu -- were leaving via free agency. But the addition of Teixeira should address any offensive concerns.

The Yankees will now have to brace for criticism from within baseball over their spending. ''At the rate the Yankees are going, I'm not sure anyone can compete with them,'' the Milwaukee Brewers' owner, Mark Attanasio, said in an e-mail message to Bloomberg News. ''Frankly, the sport might need a salary cap.''

The Yankees are also likely to make roster moves in an attempt to absorb some of the cost of Teixeira's contract and attempt to keep the 2009 payroll under $200 million. With nearly $90 million coming off the payroll with the departures of Giambi, Abreu, Mike Mussina and others, the Yankees felt that was a realistic goal, and it still may be.

But to cut expenditures, the Yankees may have to consider trading Hideki Matsui, who is going into the final year of a four-year, $52 million deal, or the recently arrived Nick Swisher, who is due $21 million over the next three seasons.

Another, more somber, option involves Andy Pettitte, to whom the Yankees have a standing 2009 contract offer of $10 million, a marked pay cut from the $16 million he made last season. It is possible the Yankees may withdraw that offer, say goodbye to Pettitte for the second time in the last five seasons and look for a cheaper option to fill out their rotation.

Even the Yankees, standing apart from the rest of baseball with their spending, are not averse to bargains.

PHOTO: The 28-year-old Mark Teixeira, a switch-hitting first baseman, was one of baseball's most coveted free agents. He batted .308 last season with 33 home runs and 121 runs batted in.(PHOTOGRAPH BY CHRIS CARLSON/ASSOCIATED PRESS)(pg. A16)
CHART: Big Spenders: The Yankees have the four biggest current contracts in baseball.(Source: mlbcontracts.com) Chart details player contracts.